Faster broadband initiatives such as the National Broadband Network will be a blessing for small businesses, but only if they survive the charge of international competitors.
A recent article in Technology Spectator pointed out the issues some small businesses will face when the NBN rolls out in Australia. Andrew Twaites of Melbourne consultancy The Strategy Canvas argued that, while access to super-fast broadband will have many positives, there “will also be costs and a fair degree of pain” for some small businesses.
The additional competitive pressures that the NBN rollout is likely place on segments of the small business sector that have to date enjoyed a degree of natural protection as a result of their customers’ inability to access super-fast broadband.
Once that natural protection falls away, many small businesses will for the first time be exposed to competition from interstate and overseas businesses.
Most at risk will be transaction-based service providers who can be easily replaced by lower-cost overseas companies, particularly now that foreign suppliers are easily accessible through services like O-Desk and Freelancer.com.
One of the reasons why small businesses are threatened is because they are under-capitalised; many simply can’t invest in the technology or training they need to compete. There’s also the reluctance to embrace technology. According to the most recent Sensis e-Business report, over half of all small businesses in Australia don’t have even a basic website.
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On a recent holiday in Northern NSW, I checked dozens of tourism businesses’ online presences. Few had a website and almost none had bothered filling in their Google Places profiles, let alone set up social media presences. Yet almost all of their new customers are looking for them on the web, increasingly through mobile devices or social media services, where they are invisible.
Not having a business website, local listing or Facebook page are trivial things; but the fact that most businesses haven’t done the basics doesn’t bode well as the speed of commerce accelerates over the rest of this decade.
That many small businesses will be put out of business by today’s changes isn’t unprecedented – blacksmiths were out of job shortly after the motor car rolled out and whale oil manufacturers by gas and then electric lighting.
As Andrew points out, we assume “creative destruction” just disrupts big incumbent corporations. In reality, it’s the little guys who feel more pain than insulated executives of big business.
Many of us little guys are going to have to start thinking about adapting to very changed times, or else the risks of being digital roadkill are real.
How do you think your small business will fare when the NBN is rolled out? Will your business survive the competitive pressures?